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The sharing economy priority for new digital ministry
Published on: Monday, December 18, 2023
By: Geoffrey Williams, FMT
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The sharing economy priority for new digital ministry
An often overlooked but huge, new possibility for the digital ministry will be to promote the sharing economy which is at the heart of market-driven digital disruption in the way people work and do business. - Pic for illustration only
The new digital ministry was a surprise innovation from the Cabinet reshuffle and will help push the digital agenda more assertively not just in economic terms but also in social, business and innovation terms.

Digitalisation is moving very quickly and policy must keep pace to maximise the economic and social impact and ensure maximum digital access and involvement.

The role of government is to acknowledge and facilitate these opportunities, not to interfere and try to control it. This is why a separate ministry can be very useful.

Measured in traditional terms, the digital economy is worth around 23% of GDP according to the statistics department with 1.2 million people employed in the ICT sector.

This is the tip of the iceberg, digital economy activity and e-commerce is extending to all aspects of the economy and is worth around 13.3% of GDP. E-payments, digital banking and cashless transactions will hit around RM1.5 trillion or almost 80% of all GDP this year.

An often overlooked but huge, new possibility for the digital ministry will be to promote the sharing economy which is at the heart of market-driven digital disruption in the way people work and do business.

We often use other terms for the sharing economy including gig-economy and freelancing but we are all completely familiar with it through home-grown and international businesses such as Grab and AirAsia in e-hailing, FoodPanda and LaLaMove in delivery services, GoGet and Make Time Pay in freelance employment and service providers and online shopping sites such as Lazada and Shopee.

The sharing economy unlocks the value of assets, products, services and skills that are otherwise underused by providing access and markets through digital platforms.

It covers all areas of business from e-hailing and delivery, through personal welfare and care services to professional and business services, freelancing and education.

To put the economic potential into context, our research shows that the sharing economy will create more than four million new employment opportunities by 2030 whereas the New Industrial Master Plan (NIMP) aims to create 600,000 new jobs in the same period.

Salaries for jobs under the NIMP would rise from RM1,976 to RM4,510 whereas average earnings for sharing economy workers would rise from around RM1,000 to RM6,000.

The additional value-added under the NIMP would be only RM20.6 billion above normal growth rates over seven years but the economic value of the sharing economy would rise by RM310.2 billion from RM2.6 billion now to RM312.8 billion by 2030. This is fifteen times as much.

To boost Malaysia’s digital economy through the sharing economy platforms and ecosystem there needs to be a new strategy and a new philosophy with input from independent advisers.

Fortunately work done so far by the Malaysian Digital Economy Corporation (MDEC) provides a very sound foundation based on input from thought leaders and practitioners in the field.

The national Sharing Economy Committee and initiatives are in place for employment opportunities and on-boarding sharing platform providers, freelancers and businesses.

MDEC’s own eRezeki platform helps people earn extra income as gig workers and freelancers on validated gig-economy and sharing economy platforms and there are new proposals on the certification of sharing economy platforms.

Creating a national certification programme for sharing economy platforms in Malaysia will promote reliability, trust and quality between the users, service providers and platform operators.

It will help users find good quality platforms which protect their rights as consumers, enterprises and workers.

This will promote confidence and higher adoption of sharing economy services among businesses and consumers and should be high on the agenda of the new digital ministry to maximise the massive growth potential of this new market.

The views expressed are those of the writer and do not necessarily reflect those of FMT.

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